Herb Kelleher: the Yoda who democratised the skies

Herb Kelleher, the best CEO in America according to Fortune magazine, was the inventor of the original low-cost airline. He died this month aged 87. Jane Lewis reports.


Some called him "the high priest of ha-ha"; to Ryanair boss Michael O'Leary, he was "the Grand Master Yoda of the low-fare airlines". But there's a case to be made that Herb Kelleher, who died this month aged 87, was "the best CEO in America", says Fortune. The founder of Southwest Airlines is credited with reinventing an industry: he was the capitalist who "democratised the skies", spawning dozens of imitators, says

The Wall Street Journal. But Herb, as he was known to everyone, also showed what enlightened leadership can do for the bottom line. Famously decent to all his employees, he grew Southwest into America's biggest discount carrier boasting a continuous annual profit streak dating back to 1973.

An easy-going ethos

Although Kelleher had a pronounced "Texas swagger", he was actually raised in New Jersey, the fourth child of Ruth and Harry Kelleher, who was general manager of the local Campbell's soup factory, says The New York Times. He credits his mother with opening his eyes to the world by engaging him in long conversations when he was a child. "She had a very democratic view of life" and "enormously wide interests in politics and business," he later observed. She was also big on ethics.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Herb attended Wesleyan University in Connecticut and later law school in New York. After marrying and starting a family, "a desire to start his own firm" prompted a move to Texas. There, in 1966, he was approached by a client, Rollin King, with the seemingly "outlandish idea" of starting an airline that would fly passengers cheaply within Texas. Company lore (sometimes disputed) has it that the pair used a cocktail napkin to sketch a plan for the business.

An affront to idealism

A key distinction Kelleher made was between being "tough" and being "mean", says Forbes. Anyone who ever competed against or worked with him "knew he could be tough" and he encouraged the trait in staff when necessary. But he saw "mean" as "dehumanising, shaming and belittling". "Mean will get you fired," he used to say. Simplicity was at the heart of his ethos: he under-promised and over-delivered and didn't take himself too seriously. "When he saw an opportunity, he didn't need analysis," concludes a former rival. "He just went after it."

Jane writes profiles for MoneyWeek and is city editor of The Week. A former British Society of Magazine Editors editor of the year, she cut her teeth in journalism editing The Daily Telegraph’s Letters page and writing gossip for the London Evening Standard – while contributing to a kaleidoscopic range of business magazines including Personnel Today, Edge, Microscope, Computing, PC Business World, and Business & Finance.

She has edited corporate publications for accountants BDO, business psychologists YSC Consulting, and the law firm Stephenson Harwood – also enjoying a stint as a researcher for the due diligence department of a global risk advisory firm.

Her sole book to date, Stay or Go? (2016), rehearsed the arguments on both sides of the EU referendum.

She lives in north London, has a degree in modern history from Trinity College, Oxford, and is currently learning to play the drums.